Johnson & Johnson (NYSE:JNJ), the pharmaceutical giant known for such iconic brands as Band-Aid, Listerine, and Tylenol, recently reported second-quarter earnings with mixed results. Sales for the quarter were $17.8 billion, down a whopping 8.8% from the same quarter of 2014.

As was the case in the first quarter of this year, the majority of the decline was due to foreign exchange issues, with 7.9% of the decline being directly attributable to currency fluctuations. Earnings, however, exceeded second-quarter results from last year -- the company earned $4.5 billion and $1.61 per share this year compared to $4.3 billion and $1.51 per share last year.

On the heels of these results, the company increased its guidance for 2015. J&J now expects per-share earnings for the year to be in the $6.10 to $6.20 range, an increase from earlier estimates of $6.04 to $6.19. Investors did not seem all that impressed by the change in guidance, however, as the company's stock price declined 0.5% the day of this announcement.

Revenue from all three of the company's divisions (consumer products, medical devices, and pharmaceuticals) saw quarterly declines year over year.

Declines in the pharmaceuticals division, which is the most important of the three business segments, were also a result of the enormous, but anticipated, sales decline for J&J's now essentially obsolete hepatitis C drug, Olysio, due to the superiority of Gilead Sciences' Harvoni. Along with drugs becoming obsolete, J&J investors may also be concerned about impending patent cliffs, especially for the company's top-selling drug, Remicade, which holds a massive 75% market share in the U.S. IV immunology marketplace. The Remicade patent has already expired in Europe, and the drug should have patent protection until 2018 in the U.S.; however, J&J's stranglehold on this marketplace may be in jeopardy sooner than that. Time will tell if ongoing litigation surrounding this patent is resolved in the company's favor.

Regardless, Remicade sales continue to grow -- second-quarter sales in the U.S. jumped by 6.6%. Two other drugs, rheumatoid arthritis drug Simponi and psoriasis drug Stelara, also helped offset the lost revenue from Olysio by increasing their sales this quarter by 30% and 9%, respectively.

The king is dead, long live the king
To mitigate concerns about Remicade and the patent expirations for the company's other top-selling drugs, J&J has many new drugs on the horizon. The company's research and development group has several potential blockbuster drugs in the pipeline, 10 of which the company believes have the possibility of becoming $1 billion drugs.

Two of the drugs, daratumumab for the treatment of multiple myeloma and esketamine for patients with treatment-resistant myelofibrosis, are being fast tracked by the FDA. While the future in the drug sector may seem bright, the same can't be said for the medical devices division.

Left to its own devices
There is concern in the medical devices division as sales figures declined for the fourth consecutive quarter, exclusive of currency issues, and there doesn't seem to be much growth on the horizon in the division, especially as noncore segments are divested. While slowing sales growth may be somewhat troublesome, there are potentially larger issues involving possible litigation from product recalls for various hip and knee replacement devices.

There's also an ongoing FBI investigation into the company's power morcellation surgical device, which was used to perform some 50,000 hysterectomies annually. Consequently, investors need to be mindful of potential legal expenses tied to lawsuits that Johnson & Johnson will inevitably encounter.

Truly an aristocrat
Thanks to strong free cash flow, the company's dividend remains strong. J&J increased its dividend earlier this year by more than 7%, marking the 53rd consecutive year that it has increased its dividend. It is a member of an elite group of just 10 companies in the S&P 500 that have increased their annual dividend payouts for 50 years or more.

This distinguished achievement marks J&J as a Dividend Aristocrat, a company that can be viewed as a reliable anchor for retirees seeking dependable dividend income. It also may be a good investment for anyone seeking a company that's currently paying a dividend yielding 3% -- roughly 50% higher than the S&P 500's own yield.

Is Johnson & Johnson a buy now?
While I view Johnson & Johnson as an excellent long-term investment and a company that will continue to provide its investors with solid dividend payouts each and every quarter for many years to come, I would not be looking to invest in this company today. Presently, I view it as fairly valued, and while many investors may be willing to invest in such companies, I am always looking for bargains.

I'm typically looking to invest in companies when they are priced 20% below their fair value estimate. The 20% discount is not a hard-and-fast rule; after all, fair value estimates are just that -- estimates. Occasionally I make exceptions for truly great companies like Johnson & Johnson, and might consider making investments when such companies are priced 10%-15% below their fair value.

I have been a longtime J&J investor and expect to be one for many years to come. However, because the stock is currently priced almost exactly at what I see as its fair value, I won't be adding any new money now. I'll just continue to be a content investor, happily cashing those quarterly dividend checks, hopefully for another 53 years.